Australia: As of 1 May 2015, the Building and Construction Industry Security of Payment Amended (Retention Money Trust Account) Regulation 2014 (NSW) commenced. Under the Regulation, ‘head contractors’ must deposit subcontractors’ retention money into separate trust accounts with authorised deposit-taking institutions, preventing it from appropriating that money during the course of a project. However, the Regulation only applies to contracts, entered into after the commencement date, between contractors and subcontractors in respect of non-residential projects valued at over AUD 20 million. The Regulation follows recommendations put forward by the Collins Inquiry which sought to identify measures to reduce instances of insolvency in the construction industry. June UK: Aspect Contracts (Asbestos) Ltd v Higgins Construction plc [2015] UKSC 38 involved an appeal against an alleged overpayment pursuant to adjudication proceedings which had been issued a long time after contractual and tortious liability had arisen, meaning that shortly after the adjudicator’s decision was received any further proceedings were time-barred. The question the court had to consider was whether there was an implied term allowing the paying party (Aspect) to recover any payment made if it was subsequently established by litigation or arbitration proceedings that the payment was not due. The Supreme Court held that, without such an implied term, adjudication made no sense as a provisional measure. As such, it found that it was “a necessary legal consequence of the Scheme that Aspect must have a directly enforceable right to recover any overpayment to which the adjudicator’s decision can be shown to have led, once there has been a final determination of the dispute”. A fresh cause of action therefore arises with any payment made pursuant to an adjudicator’s decision, and the limitation period for any such action runs from the date of such payment. No corresponding cause of action, however, arises for the payee (Higgins) to recover any outstanding balance owing from its original claim. In this regard the court noted that Higgins had decided not to commence proceedings to recover the balance of its claim following receipt of the adjudicator’s decision.
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